About $24.9 million of Eddy County’s $84.1 million in state funding for K-12 public schools last year was attributed to state tax revenue generated by extraction operations, per a recent report from the New Mexico Tax Research Institute, a self-described non-partisan tax research group based in Albuquerque.

Carlsbad received about $14.7 million from the oil and gas industry for its public schools, while Artesia got about $7.7 million and Loving was granted $1.5 million in state funding supported by the industry.

New Mexico State University Carlsbad got $1.3 million from the industry, out of its total $4.2 million in state appropriations.

Further east, Lea County gained $31.5 million in state funds attributed to the oil and gas industry, also about 30 percent of its $106.2 million in state funding for public schools.

In total, the report showed New Mexico gained about $1.74 billion last year for the State’s general fund.

That total included about $711 million for public schools, and about $223 million for state-funded universities, colleges and other institutions of higher education.

Ryan Flynn.(Photo: Courtesy Photo)

The largest beneficiaries, the report read, were larger public school district, with Albuquerque Public Schools and Las Cruces Public Schools gaining $211.4 million and $84.3 million respectively.

“Regardless of where you live, New Mexico’s oil and gas industry is supporting your local schools and communities, and we can all be proud of our place atop the national stage in energy production,” said Ryan Flynn, Executive Director of the New Mexico Oil and Gas Association.

“The oil and gas industry is an integral part of our great state, and we are committed to growing our economy while protecting our environment, keeping communities safe and taking responsibility to ensure clean air and water.”

New Mexico was recently ranked the third-largest, crude oil-producing state in the nation, per the U.S. Energy Information Administration (EIA).

The EIA reported in December that the state produced about 16.4 million barrels in October 2017, the third most in the country.

“We are turning an economic corner because of a surge of activity and investment in the Permian Basin and New Mexico’s attractive and balanced business environment,” Flynn said.

“We can expect these trends to hold up for the foreseeable future if New Mexico remains a favorable place for oil and natural gas producers to do business.”

Tax reform entices Exxon

Amid the growth in southeast New Mexico, an oil giant could triple its production in the Permian Basin, looking to invest $2 million in terminal and transportation expansion after recent changes to the corporate tax rate.

Irving, Texas-based ExxonMobile hopes it can increase daily production to 600,000 oil-equivalent barrels by 2025, bolstered by recent tax reform contained in the Tax Cuts and Jobs Act of 2017, signed by President Donald Trump in December 2017 and going into effect this year.

While the true benefits of the act were heavily debated since its signing, it is intended to reduce the corporate tax rate from about 35 percent to 20 percent.

Such a reform inspired confidence in Exxon leaders, read a Tuesday news release.

United States Secretary of State Rex Tillerson speaks with South Korean Foreign Minister Kang Kyung-wha during a meeting on North Korea in Vancouver, British Columbia, Tuesday, Jan. 16, 2018. Officials discussed sanctions, preventing the spread of weapons and diplomatic options.(Photo: JONATHAN HAYWARD, AP)

“Recent changes in the U.S. corporate tax rate create an environment for increased future capital investments, including ExxonMobil’s plan to spend more than $2 billion on transportation infrastructure to support its Permian operations,” read the release.

The increase in volume, the release read, will be supported by reduced drilling costs, land expansion and technology improvements.

Exxon owns acreage in the Delaware and Midland basins, both part of the Permian, featuring multilayer oil zones the company plans to drill using horizontal unconventional methods, also known as hydraulic fracking or fracturing.

In total, the company has drilled more than 5,000 wells using these methods.

“ExxonMobil has the ability to efficiently and profitably develop this attractive resource,” the release read.

The horizontal rig count is expected to grow by 65 percent during the next few years, read the release, which will support Exxon’s ongoing expansion in the region.

President of Exxon subsidiary XTO Energy, which operates in southeast New Mexico, Sara Ortweid said the geographic location and years of experience give the company an advantage in the Permian.

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(Photo: Jessica Onsurez Current-Argus)

“Our geographic and competitive advantages in the Permian position the company for strong growth and long-term value creation,” she said. “We can deliver profitable production at a range of prices, and we have logistics and technology advantages over our competitors.”

The company expects its recent $6 million acquisition of the Bass family’s Permian Basin oil interests will also help support further growth.

That means more oil from New Mexico could be sent to Exxon’s refineries on the Gulf Coast, Ortwein said, producing a “higher quality” product.

The move is meant to use the Permian’s crude deposits to support Exxon’s Growing the Gulf project, intending to expand Exxon’s refinery facilities in that region which extends from Texas to Florida.

“With this production growth, we are well positioned to maximize value as increased supply moves from the Permian to our Gulf Coast refineries and chemical facilities where higher-demand, higher-value products will be manufactured,” she said.

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.